Should You Invest in Homes with a Pool?

Maybe it’s the 8 bags of shock I’ve been exposed to over the last two days that’s “inspired” me to right this post, but either way, I know I’m not the only one with the looming feeling investors might face this time of year. “Should I buy a house that has a pool?”

In places like Arizona, we might look at things a little differently, (ie, any relief from the scorching desert is a plus!) If you’re in the midwest, having a pool might mean different costs and value. But, let’s look at the pros and cons of purchasing a rental or flip that has a pool.

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How Bad is It?

I’ve seen my share of distressed properties, and I guess after awhile, I feel like a Ghostbuster walking through freshly-minted foreclosures. (“I ain’t afraid of no ghosts!!”) This comes with the exception of pools, though. A dark green pool may be hiding years of neglect, bad siding, algae, and who knows what else.

It can be difficult to estimate what pool repairs may be needed, and if you have say, 20 minutes to do a full inspection of the house, the “ifs” of a range of $50-$5,000 can swing your margins in the red quickly. If the home is a short sale, the pool may be sitting for months longer and cost more than you initially estimated, as well.

If you have longer to get an inspection, and a pool person is able to give you an estimate on getting the pool back in working condition, then the initial costs may be worth the investment. However, there’s further things to consider.

Who will be responsible for maintaining the pool?

Does your state laws require fencing, depending on who’s purchasing/renting the house from you? If so, who’s responsible for paying for that?

If you allow the renters (if you rent the property out) to take care of the pool, how are you assured they are actually checking and keeping the PH levels balanced and maintaining the cleaning?

Are you willing to accept the maintenance down the road for redoing decking/siding? Lost or stolen equipment?

What extra liability might you face if little Suzy’s friends come over and heaven forbid, are left unattended and something fatal should happen?

Liquid Gold?

Much of this might be negated if you’re flipping the property. Similar to a fireplace in a warm-weather state building in more value (go figure!), a pool may add extra attraction to your property as well. It’s advisable not to ever add the pool yourself, since dollar for dollar you will never re-coop even your costs.

However, if there are matching houses and one has a pool, the one with the extra amenity may help you procure a buyer that much faster, therefore decreasing your holding time and/or increasing your sales price.

I know many investors out there wouldn’t touch a pool with a 6′ pole (or a skimmer, I suppose!), but others find it to be a draw as a rental or a flip.

What do you think? Is it worth the risk and added cost or do you stay far away from homes with a liquid headache in the backyard?

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16 Comments

There are so many factors involved… size of the pool, etc, etc, etc… it’s hard to just give a yes or no answer. There’s certainly a big difference between the standard no frills pool and the custom ones.

I will say some of our most desirable rentals that rent out very fast here in Las Vegas for $400+ more then nearby comparable rentals are pretty nice to have. Especially when there is a glut of rentals from all of the investors that won’t even consider purchasing an investment property with a pool… 😉 In other words… it’s not like a somebody looking for a pool home to lease in Las Vegas is going to have 100’s to choose from.

You certainly need a pool expert on your side that knows the mechanicals and how much all of the clean up / repairs are going to cost. My guy does it for me for free because he knows he’s probably going to get the work and monthly maintenance contract.

Tough call… You certainly have to use a pro with experience in this area.

For investing probably not worth the headache of properties in the lower price range and there are quite a few buyers who actually would prefer not to have a pool for one reason or another. Upper end however buyers might expect a pool that is in great condition that adds to the desirability of the home and could bring in more profits to the investor.

Here in the South, a pool is a great escape from the hot summers. However, in Charleston, SC I’ve found that most buyers prefer a community pool over a private pool in their backyards. With many of my clients, seeing a backyard pool at a listing is a deal breaker due to costs and upkeep!

I have 3 pools. I hate them all. Big stinking money pits and they don’t net me any extra rent. I just got done dropping $7K on one of the pools for resurfacing, repair and new tile work. I don’t think I will ever see that money again.

Good Article Tracy, we flip here in the wonderfully cold Northeast. Our first pool experience was wonderful, we used it al summer! But since then we have had over 7 and all have been headaches. Some people love them, but some people refuse to buy if there is a pool. They are a major headache to maintain, especially when you have 3 or more at the same time. They seem to collect all worst of dead critters, and the towns here love to make you put up all sorts of extra fencing. So like anything, we need to take the good with the bad, and look for that right buyer who loves pools. Oh, and it really helps if you can sell the house in a hot summer day! Thanks for the article.

I don’t mind buying a place with a pool, but that is because I would probably remove it. I don’t have experience in this area of construction. What is the cost to have them removed? And if you remove them, do you fully remove them, fill them in, or a bit of both (break up the top, punch a hole in the bottom, and fill it in)?

I have asked myself this very question time and time again over the past several weeks. I have been after a house in Daytona Beach for several weeks now. I have put countless offers in on it and get counter offers on it that are steadily getting closer to the “buy” zone, but that pool has me very nervous.

It is a foreclosed property and they have “boarded up” the pool. You can’t even see it, with the way they have enclosed it. It is a great house in a great location, but that darn pool is what has kept me from taking any of the counter offers so far. I figure if I can’t get it cheaper to offset that potentially “disastrous” pool, it isn’t worth gambling on it.

I intend on wholesaling the property, so I’m not overly concerned about the pool on my behalf, but if it is a total mess, it will give my end buyer huge headaches and could kill that part of my deal.

I just sit and wait for it to either hit the “right” price or watch some other investor walk away with it.

Thanks for your input Tracy, but pools still make me nervous, especially when I can’t even see them.

Try to use that as a negotiating tactic to keep the house at such a price that if the pool in fact *does* require attention, you’re not going to be without wiggle room. You’re right to feel nervous, but don’t let your emotions overpower what should be a logical business decision. Let us know how it goes Eric!